Pabst Owner Metropoulos Considers Bid for Hostess Brands

Source: Bloomberg

C. Dean Metropoulos & Co., the private equity firm that owns Pabst Brewing Co., is considering an offer to buy Hostess Brands Inc., which said today it plans to liquidate its business. “Our family would love to purchase these iconic brands,” said Daren Metropoulos, a principal at the Greenwich, Connecticut-based firm, which paid $250 million for Pabst in 2010. “We are actively pursuing this deal as no doubt strategics will also.”

C. Dean Metropoulos, founder of the firm, has specialized in purchasing struggling brands, such as Chef Boyardee and Bumble Bee Tuna and turning them around. The firm paid close attention to the maker of Twinkies and Wonder Bread during its bankruptcy proceedings, Daren Metropoulos has said.

We have analyzed this opportunity very carefully for a few years now,” Metropoulos said in an e-mail. “Shedding the complications of the unions and old plants makes it even more attractive.”

The 82-year-old company also makes Hostess CupCakes, Ding Dongs and Ho Hos. The private equity firm is “fully prepared to participate in any process involving selling the brands,” Daren Metropoulos said.

76. does that guy do any songs about Twinkies?

66. eeek!

I love good beer just as much as the next guy (GOOOD beer, not supermarket "good" beer like Heineken) and PBR is my go-to beer. $7 a 12 pack is hard to beat and its far better than High Life, Keystone, etc.

77. so you don't like Heineken, and you do like PBR...

92. Let me tell you about Heineken

Heineken is shipped from Holland in unrefrigerated containers. It is stored in an unrefrigerated warehouse, hauled in dry vans to destination, and sold in green bottles. In the US it is the world's skunkiest beer.

93. Heineken is drinkable

The meaning I was trying to convey is that I really really REALLY like good beer. Stone, Rogue, Anderson Valley, Youngs, Lagunitas(!), etc. Even so, since I cant afford to drink $3 bottles of beer all day, Ill take PBR. Its far better than most 'cheap' beers like Coors, Bud, Keystone, Miller, etc.

42. It is not the Pabst part of your post that is bull It is the last part.

Then you should have no problem producing evidence that the union was playing chicken torpedoed Hostess.
Unless you feel that people wanting a decent wage with benefits is playing chicken.
You are running a company and it goes into bankruptcy and you ask the unions to give back a little, they do.
In the course of time the company goes through 6 management changes and the current management are hedge funds and a Wall Street investment group that has put on enormous debt. None of which know anything about the baking industry. You go into bankruptcy again and you ask the union to once again give back, wages, pensions, pay more for health care. The people, 92%, say no. Meantime, under bankruptcy, the company because it is being run so well decides to give the CEO a pay increase from $750,000 to $2.5 million. The next 9 execs also get pay raises, they are not making as much nor do they get as much percentage in pay raises. But they get raises. And you can bet your ass that the execs were not asked to give up their pensions nor pay more into their health care plan.

I was a baker, I belonged to that union, I negotiated union contracts.

If anything you owe a HUGE apology to unions. I might even go as far as to tell you to start a new post with your apology. Unions are the reason why the middle-class ever existed. With out them you will have no middle-class. They are the backbone of the Democratic party.

If you do not feel this way I am wondering why you are on this board and why you are a democrat.

45. That part is based purely on what I have read which is that

Hostess tried to strike a deal and the unions said no to it and thats purely the facts of what has been reported in the news, if you can refute those facts with something else other than conjecture over why it happened then please do so and as for me being a democrat....I find it interesting that you are using a very similar tactic practiced by the more conservative republicans against their more moderate brethren.

62. We we can if we ignore that the question you asked was "Then what part of my post was innuendo??"

65. You were complaining because you needed more facts

I gave you more facts and you refuse to talk about these facts.

' and maybe it will be a better union than the one that decided to play chicken and torpedo Hostess.'Do you still hold this opinion after receiving more facts??
I find this a strange opinion for a democrat to hold ..............
Let's discuss why you would believe this

71. No, I was pointing out that we lack access to things like say internal emails that prove that this

was their plan, you were the one that threw the innuendo in not me at the end just because I refuse to automatically take your word or anyones word that x event has happened without anything to back it up.

73. But you had no problem saying that the workers torpedoed the company

without any facts to back it up , but I guess in your world that is okay
because workers should just work for whatever the company is willing to pay them because they should just be happy to have a job

Now if you want you could respond to the information that I provided to you .......

81. Actually I am willing to amend that part somewhat.

The fact is it was only some of the workers who rejected the offer so only some of the workers torpedoed it or are we now pretending the union didnt reject the offer after being warned the company would be forced into declaring bankruptcy if they rejected it?

82. 92% rejected it

I see you have limited reading comprehension
I gave you all kinds of facts and you did not bother reading them

I will repeat some of them:
They are already in bankruptcy
They gave their top execs 200-300% pay raises WHILE they are in bankruptcy
So if they can do this then how do they justify asking the workers for money back??
The workers had already given back to the company during the last bankruptcy
Six changes of management in the last 8 years
Company added $900 million in debt

Workers can not torpedo a company
I can see by your words that you feel that the company was being well run and would not go out of business if it was not for the workers just trying to keep their same pay and benefits. Not getting a raise but just to keep what they had.

Would you like it if you had your pay cut twice, lose your pension, and pay more into your health insurance??

It would be nice if you started answering the questions put to you instead of throwing other things out there.

105. Start with post #42 and go from there

You accuse me of making statements that I did not make.
I asked numerous questions throughout my posts and you fail to answer them
You make a complaint and I ask you where and then you change the complaint ... you even failed to answer why you are here if you do not support unions
On and on the questions were asked and you did not answer
So answer them now ............

106. I asked you for evidence though, you provided opinion pieces that had alot of speculation instead.

And I skimmed a bit from 42 to try and find it but I refuse to reread every post of yours because you claim I didnt answer a question, so please have the decency to post a link what the freaking question is that I allegedly didnt answer.

108. I listed facts ...... not my opinion

If you do not like the facts I listed then have the decency to refute them
You accused me of blaming Pabst ............ I never did ........
You refused to answer a lot of questions I don't feel I should have to point them out to you because YOU refused to answer them as they were asked.......
You accused the union of torpedoing Hostess ........ I wonder what you base this opinion on

Do you feel workers should work for and wage and benefits a company feels is fair in their minds??

109. It appeared to me that you were blaming Pabst but maybe I misunderstood in

which case I apologize to you for that.
As for not answering a lot of questions, I finally reviewed more of your posts to me and maybe I am wrong but I did not see a single question that I failed to answer before you started with the insults around post #82, if I am mistaken about that please point it out to me.

And one of the unions did torpedo Hostess or atleast thats what Hostess is claiming and furthermore we have been over that already and that isnt an opinion its a fact that one of the unions did say no to the deal Hostess offered, a deal which if I recall the other unions took.

"Do you feel workers should work for any wage and benefits a company feels is fair in their minds??"
Thats not the topic here, I will try to answer it though.
No, the unions should fight hard to get the workers the best deal possible.
Was the deal hostess made a good one? I do not know, what I do know though is the other unions involved accepted it so they must have thought it was fair which makes me wonder if Hostess was offering the same deal offered to all of the unions or if the bakers union got the short end of the stick when it came to the deal Hostess offered them.

110. How about we start over??

Pabst has nothing to do with where Hostess finds itsself today.
One union group of workers did reject the company offer by 92%

This sub-thread started out by me questioning your use of the term 'one of the unions did torpedo Hostess'
I worked in a bakery for 20 years, I belonged to that same union during that time, I served on 5 contract negioations, I was a shop stewart for about 13 years. One must understand that the International Union represents the workers. They do not control them. I have seen Unions do stupid things and good things. So I am open to seeing a Union from both sides.
To blame the workers one must know that they were asking for too much. I do not know what the offer was, but to the workers it was too much of a giveback. I saw the Hostess value put at $950million to $980million. Hostess is carrying $850million to $900million in debt. That is NOT good management.
To ask for givebacks and the workers to accept them the workers need to trust management. The workers have seen how the company is being run and the workers found no trust. The management has changed 6 times over the last 10 years. Giving management pay raises when going into bankruptcy is not a good management decision.

And I do question someone that just takes management explanation for the downfall of a company.

As far as your last paraghaph, that is the topic. I have seen companies offer different union workers different packages. If you do not know the facts such a statement as 'torpedo' is offensive to union workers. To make such a statement you need to put yourself in their place and look at the history.

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000 and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

And this is not the only article questioning Hostess blaming the union workers

90. I clicked it so what part of it do you want me to focus on?

The part where it says that Hostess may have done this on purpose? If your answer is yes then a little news flash for you, I already said in this thread on other posts and even in other threads before this one days ago that its possible that they may have done that.

27. The union didn't cause this. They are just a handy scapegoat. n/t

30. I will repost part of a question I posted a few days ago over this thing for you or

atleast part of it and that is...............the real question here is are the Hostess claims legit or not? If not then of course the union should fight for there workers however if the problems Hostess is facing are legit and not the fault of criminal activity nor them trying to screw the employees then what do you want them (Hostess) to do exactly?
Now, I personally do not have access to the internal books of Hostess so I do not know if they did this was the intent of screwing the workers, if you or someone else has such evidence then please by all means post it but until then I have to base my current opinion on the few facts I have.

24. It's the new bankruptcy scam. Well not so new, Romney has been doing it for quite a while.

9. This just makes me sick!

“We have analyzed this opportunity very carefully for a few years now,” Metropoulos said in an e-mail. “Shedding the complications of the unions and old plants makes it even more attractive.”

I started thinking about Wall Street....I guess they no longer do M & A (Mergers and Acquisitions). Instead they load the target company with debt, management takes huge fees and salaries, then the company is forced to file bankruptcy so the New Buyer can buy the assets for pennies on the dollar and shed the UNION. I wonder what the Wall St. Boyz call this particular biz model? Robbery?

Getting rid of the UNION is what these business boyz think is just fun...a great benefit of filing bankruptcy.

I just heard a woman who is on the strike line at Hostess...she had worked there for over 30 years. She said the current offer from management was no pension, less pay, and pay more for health care. She said, we would basically be working for minimum wage.

57. yes! too many don't believe this is perfectly legal, and incredibly sleazy! How long before Mitt

is back at this game again? He could be making tens of millions per deal doing this, especially with his name now and quarter billion, there's no leveraged buyout he couldn't get approval for a loan from a bank, using the victim company's own value!

ugh! we're being eaten alive, and too many blame the workers who are having their legs and arms chewed off by the sharks!

16. femrap, can you support that though with numbers?

I mean sure if you have proof that Hostess was lying through their teeth about their debt and or say some emails showing that was the plan all along then great, if not though its dangerously close to the area.

IN DEBT January 13, 2012, 2:12 pm4 Comments
Hostess Has a Lot of Debt, but Few in Finance
BY STEPHEN J. LUBBEN

Tim Boyle/Getty Images
Hostess Brands is back in bankruptcy again, arguing that its last filing did not really accomplish all that much, despite taking a rather long time.

In particular, the company has more than $850 million of secured debt outstanding. It has more than $180 million in accrued workers compensation liabilities. Another $50 million to $60 million is outstanding to trade creditors, plus $36 million in lease obligations. And now it is going to lay a $75 million debtor-in-possession loan on top of that to provide additional cash.

25. The problem which you are ignoring is

my original question of "can you support that though with numbers".

Edit: and by numbers I mean their own internal books and or emails regarding the companies complete finances.

Dont get me wrong please, I am not saying that you are wrong but rather that the fact is that without any evidence to prove otherwise its just speculation that the company did this all to bust the union.

29. Big companies have been "softening" up workers over the years, to accept less and less

in the way of pay and benefits. So now the vulture capitalists are swooping in, declaring bankruptcy, restructuring , and the company rehires staff with all the wonderful pay and benefits of Walmart. wop te do! O boy, I got a job, doesn't pay the bills or feed my family, but hey, I got a job.

86. I understand your point....

it has taken a while for workers to realize how badly they have been treated. I believe the OWS Movement opened the eyes of many to that horrible treatment.

Hopefully the workers around the world will recognize how badly they have been treated and WALK OUT.

I think of the workers in China working 6 days a week, 12 hours a day, and living in small dormitory rooms with 3 beds/room. If the US hadn't had a Union Movement, we would be in the same dire straits.

89. That's what I mean, little by little so we didn't notice, OWS is our hope for positive change,

especially for the up and coming young generation who are tomorrow's leaders. Never again be fooled by junk journalism, lot's of junk toys, the frivolous garbage of a consumer society. Overdosed and overstimulated and didn't realize what was hitting us. Yes, OWS has brought many people together. For the first time in a long time, people were communicating on a grand scale, face to face, that made a huge impact on the message they shared.

This video, China Blue, would be us in a Romney world, or so he would like.

I cannot look at Walmart, Target, Kmart clothing, without thinking of these workers. I choose my clothes and products carefully, make in America whenever possible. I excel at recycling. lol

98. Everyone should have to watch this

I stopped buying things made in China back in 1989 when Tiennamenn Square (sp?) occurred. Occasionally, I have to buy something such as a fan since China is the only country that makes them.

I always look at Country of Origin labels. I know where everything is made and I can spot trends as to movement of products from country to country. Sure am glad I bought a boatload of socks and shoes before manufacturing was shipped to China. I saw that coming.

Now, I'm to the point that I don't need anything except food and basics. In fact, I've been trying to sell things at the local Thrift Store and Consignment stores.

I recycle as well...that's the least I can do for Mother Nature. It's amazing how little trash I have.

17. I think we all know how this ends.

28. I believe your post about sums it all up.

It really makes me sad to think of how the average person who worked hard for the company for years now will be the one getting screwed where as those on the higher corporate level will probably never have to pay for their decisions.

35. Employees have invested their lives

Most of the others are short timers that invested a few bucks and because they own the club they will get rich, and the employees and taxpayers will get the shaft. OWS is needed more than ever but the PTB was afraid of them and thus un-Constitutionally made their demonstrations illegal.

33. “Shedding the complications of the unions"

34. This is what the CEO and banksters had in mind

from day one imho. Force the union to go on strike and then claim it must go into bankruptcy. Edited to add: Actually they made crappy unheathy products and on purpose too. They didn't keep up with what the public wants. The employees only did what they were told.

These greedy thieving bxstards wanted deals, and to break the unions and to force the costs on to taxpayers. If the USA could just deport/outsource the Wall St financial sector to China the USA would be better served. They connive on ways to make money while doing nothing that is productive or beneficial except to those in their own little club.

74. A majority of the Teamster members voted for it so it not wrong

As far as what concessions they gave I don't know the details. I read that the Teamsters position on the Bakers strike was that the Bakers should sign but that wasn't for the Teamsters to decide. It's not unusual for different Unions or even different Locals of the same Union to disagree about things and play politics. It was a messy situation that was going to end badly for all the workers in the long run anyway so its not surprising that there was some frustration and bitterness.

47. “Shedding the complications of the unions and old plants makes it even more attractive.”

wrote Mr. Metopoulos. guess its ok if another union busting business purchases Hostess once the workers have been thoroughly damaged. Or did I miss the part where he talks about bargaining in good faith with the baker's unioin?

79. Who wants these twinkies?

95. Metropoulos seems not to have looked at this very close

Hostess was, as we say, Bained to death: private equity firms who saw Hostess as a cash cow - which it was - bought the company and put most of their revenues in their pockets. The sharks claim Hostess wasn't profitable; would it have been without management fees?

This deal feels to me like the PE firm is going to "modernize" Hostess by selling the bakeries, distribution centers, outlets and distribution and going to an all-contract setup. Since Hostess' bread lines did a lot of contract baking themselves (I used to go to the Wonder/Hostess outlet in Fayetteville; they always had carts of Walmart and Food Lion house brand bread there) and the pastry lines may have done the same, how this is gonna work remains to be seen.

The old-bakery comment is good too; private equity ownership almost inevitably leads to facilities falling apart.(In Barbarians at the Gate, John Greeniaus described Ross Johnson's plan to modernize the Nabisco bakeries as wasteful spending, and that's really the mindset of all these sharks: a nickel not given to the sharks is a nickel wasted.)

The best thing these assholes can do is to find another baker to buy outright Hostess...and because of antitrust concerns it probably shouldn't be Grupo Bimbo.